What to do if you are seeing cloud bill shock and how Kainos can help you overcome it
According to Gartner, organisations with little or no cloud cost optimisation plans overspend on cloud services by up to 70% post-migration investment without getting the expected value from the initial investment. After an initial cost saving, many organisations start seeing bill shock and wonder where the promised savings cloud migration are.
So why does this happen?
It can happen for several reasons but the biggest challenges that many organisations face post-migration are:
- A lack of visibility of where their costs are
- Mapping the spend to business objectives
- Internal purchasing processes that are not aligned with the flexible nature of the cloud
- Minimal awareness among engineering teams around the impact that their decisions have on the cost of developing and running a service
- Confusion around complex cloud vendor pricing models
The flexibility and on-demand nature of cloud platforms provide organisations with more technological and architectural solutions than ever before, and the services available expand at a dizzying pace, not to mention a multitude of purchasing and billing options for these services. Cloud requires a change in how organisations track and manage spend if they are to truly realise the benefits of their chosen cloud platform.
The move from centralised purchasing, with costs amortised over the forecast lifespan of the hardware, to an environment where an engineer can purchase compute, storage, AI services, network virtual appliances and more, each with potentially different cost models such as pay by the second, by event, data volume transferred, with a few clicks or API calls requires a shift in how an organisation manages, monitors, understands and controls this spend.
In this new world, the cost of services is no longer something that only needs to be considered at the start of a project, by the architects and then signed off as a one-off investment with approval from finance. Instead, cost becomes a key non-functional requirement, to be owned by a stakeholder, with clear definitions of what is an acceptable value or threshold. This then needs to be owned and understood by everyone who is involved in designing and building a service. It should be monitored, tracked, and related to the business value of the service.
This presents a huge opportunity for organisations to not only realise significant cost savings from an economic perspective but also potentially further reduce their carbon usage by addressing this overspend as outlined by my colleague Caoimhin Graham in his blog post here
How we are helping customers optimise their cloud spend
Every organisation is different, and we understand that the type of assistance needed will vary considerably depending on where they currently are in terms of their own cloud journey. The first step is an assessment to understand where you currently are on your journey, and in parallel with this, we will also analyse your existing cloud bills to identify any early opportunities to reduce your cloud spend, improve the visibility of costs and help you to better understand the value that your cloud investment is delivering to your organisation. However, cost reduction is only part of our offering.
This assessment also allows us to work with you to understand what is most important to you as an organisation and tailor our recommendations to help you achieve your goals in the short, medium and longer-term.
We leverage our deep technical expertise and understanding to ensure that any recommendations are considered within the wider context of building and operating your service. We can help to identify areas that would benefit from greater automation, work to develop new and more cost-effective architectures and recommend alternative solutions to costly in-house services.
However, we also understand that a pure technology-focused approach only addresses part of the issue and we will work closely with your wider organisation to help develop approaches to facilitate introducing a Cloud Cost Optimisation mindset across your development, operations and finance teams.
We will work with key stakeholders to update existing processes and develop new ones which can be used to underpin the continued success of your cloud investment.
Through engaging with our Cloud Economists, you can expect to benefit from reduced cloud run costs, improvements in tooling and automation to help manage and monitor your cloud spend, recommendations on how to purchase cloud services to maximise the savings available to your organisation, process improvement recommendations and a clear strategy to further optimising your cloud estate aligned to your unique requirements. To date, we have worked with customers in multiple sectors to help them reduce their cloud bills by 60%, reduce spend on compute by up to a factor of 15 and saved one customer more than $250,000 per year on their Virtual Machine costs alone.
If you want to learn more about how we can help you optimise your cloud costs or want to speak to one of our cloud economists, click here.